In modern, large-scale, virtualized, multi-tenant environments (e.g., enterprise data centers, private and public clouds, etc.), requirements towards the interconnect technology are different and more demanding than in traditional data centers. These requirements (i.e. multi-tenant isolation, management scalability, operational flexibility, etc.) call for virtualizing the networking infrastructure, where the compute and the storage resources are virtualized.
While there are multiple approaches to network virtualization, network virtualization solutions by many vendors involve overlays to achieve isolation and separation from the physical infrastructure and centralized control to achieve flexible and scalable controllability with the logically centralized controller commanding forwarding devices. A typical drawback associated with using overlays is the encapsulation overhead.
The overhead is manifested in (1) higher processing overheads in adding and removing encapsulation headers by forwarding devices, (2) increase in the packet size, and (3) additional fragmentation and disabling the hardware off-load engines. While smart encapsulation formats and offload techniques may be used to avoid fragmentation and benefit from hardware acceleration, such methods do not address the added overhead associated with the processing and large packet.